Arbeitspapier
A Deliberative Independent Central Bank
The paper develops a communication game that is applied to the question of central bank policy and independence. The game is about the preferred degree of conservatism of monetary policy and the game setting consists of a principal (politics), an agent (central bank) and an observer (financial market participants). The extent of the welfare losses depends on the degree of knowledge, the endogenized signaling of financial market participants and the probability whether the degree of conservatism in monetary policy is adequate to nature. Consequently, a mechanism to minimize welfare losses of the principal has to be implemented. It is shown how the introduction of an institutional control mechanism with a countervailing goal function will improve the utilities for the principal.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 133
- Classification
-
Wirtschaft
Central Banks and Their Policies
Monetary Policy, Central Banking, and the Supply of Money and Credit: Other
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Game Theory and Bargaining Theory: Other
- Subject
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accountability
agency losses
principal agent model
- Event
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Geistige Schöpfung
- (who)
-
Jericha, Erwin
Schürz, Martin
- Event
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Veröffentlichung
- (who)
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Oesterreichische Nationalbank (OeNB)
- (where)
-
Vienna
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Jericha, Erwin
- Schürz, Martin
- Oesterreichische Nationalbank (OeNB)
Time of origin
- 2006
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